October 18, 2016 / 2:11 AM / a year ago

Fitch Rates Bocom Leasing's MTN Programme, Drawdown 'A(EXP)'

(The following statement was released by the rating agency) SHANGHAI, October 17 (Fitch) Fitch Ratings has assigned Bank of Communications Financial Leasing Co., Ltd.'s (Bocom Leasing; A/Stable) USD2bn medium-term note (MTN) programme an expected Long-Term Rating of 'A(EXP)'. Fitch has also assigned an expected rating of 'A(EXP)' to the proposed senior unsecured notes to be issued under the MTN programme. Bocom Leasing is the leasing arm of Bank of Communications Co., Ltd. (Bocom; A/Stable). The company provides aviation, shipping, and equipment leasing services, and is among the largest lessors in China with total assets of CNY164bn as of mid-2016. Bocom, 44%-owned by the central state, is one of China's largest commercial banks and the only joint-stock bank in which the Ministry of Finance owns a stake. The issuer under the MTN programme will be Azure Nova International Finance Limited (Azure Nova), an offshore special purpose vehicle wholly owned by Bocom Leasing. The MTN programme will be unconditionally and irrevocably guaranteed by Bocom Leasing. The obligations under the MTN programme will be rated on a case-by-case basis in accordance with published criteria and after taking into consideration individual terms and conditions of those notes. However, Fitch reserves the right not to rate certain instruments issued under the programme, such as market-linked instruments. The notes may be issued in any currency or of any tenor. The final rating on the programme and the proposed senior unsecured notes are contingent upon receipt of final documents conforming to information already received. KEY RATING DRIVERS The rating on the MTN programme and notes issued under the programme reflects Fitch's assessment of an extremely high probability of support from Bocom Leasing to Azure Nova. The senior notes to be issued under the MTN programme represent direct, general, unconditional and unsecured obligations of the issuer, and of Bocom Leasing by virtue of the deed of guarantee given by the Bocom Leasing to Azure Nova's MTN programme. Such obligations rank pari passu with all other present and future unsecured obligations of Bocom Leasing. The programme's ratings reflect the ratings expected to be assigned to senior notes issued under the programme, and are in line with Bocom Leasing's Long-Term Issuer Default Rating (IDR) of 'A'. Bocom Leasing's IDR is in turn based on an extremely high probability of support, if required, from parent Bocom. Fitch considers Bocom Leasing to be a core subsidiary of Bocom due to its strategic importance to Bocom and high level of integration with the parent. RATING SENSITIVITIES Any changes to the ratings on the MTN programme and notes issued under the programme will be directly correlated with changes in Bocom Leasing's IDR, which will in turn reflect any shift in the propensity or ability of Bocom to support Bocom Leasing. In addition, the rating on the MTN programme and the notes issued under the programme will be downgraded if there is a significant adverse change in China's capital account regulation that results in restraints on Bocom Leasing providing timely cross-border support for the debt servicing of the notes. Contact:: Primary Analyst Jonathan Lee Senior Director +886 2 8175 7601 Fitch Australia Pty Ltd, Taiwan Branch Suite 1306, 13F, 205, Tun Hwa N. Road, Taipei Secondary Analyst Jack Yuan Associate Director +8621 5097 3038 Committee Chairperson Mark Young Managing Director +65 6796 7229 Date of Relevant Rating Committee: 13 October 2016 Media Relations: Leslie Tan, Singapore, Tel: +65 67 96 7234, Email: leslie.tan@fitchratings.com; Wai-Lun Wan, Hong Kong, Tel: +852 2263 9935, Email: wailun.wan@fitchratings.com. Additional information is available on www.fitchratings.com Applicable Criteria Global Non-Bank Financial Institutions Rating Criteria (pub. 15 Jul 2016) here Additional Disclosures Dodd-Frank Rating Information Disclosure Form here _id=1013270 Solicitation Status here Endorsement Policy here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEB SITE AT WWW.FITCHRATINGS.COM. 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